With 18mn sft, office space in Hyderabad to hit a new high

TNN | Jan 9, 2019, 04.29 PM IST

HYDERABAD: This could well be a ‘bumper’ year for Hyderabad’s realty industry with a staggering 18 million square feet (sft) of office space supply set to hit the local market – the highest ever for the city. In the last two years, the figures have been a 5.6 million sft (2017) and 5.5 million sft (2018), show trade reports.

Barring some sporadic launches in Uppal and the Central Business District (such as Banjara Hills, Somajiguda etc) most of this fresh stock, analysts say, will come up along Hyderabad’s hi-tech corridor spread across areas like Raidurg, Hi-Tec City, Kondapur, Financial District and Kokapet.

Reason for the upsurge: a steady flow of big-ticket firms coupled with political stability, competitive pricing and enhanced infrastructure.

Speaking about the spiralling growth, Veera Babu, managing director of Cushman & Wakefield (Hyderabad) said: “The office market here hit an all-time high in 2018 with demand exceeding 10 million sft. We expect the momentum to continue in 2019 driven by robust business sentiments. About two-thirds of the upcoming supply in 2019 is pre-leased and larger tenants are already looking for space options that are coming up in 2020. The market will double in the next three years with nearly 50 million sft of space targeted for completion. Developers are pushing forward project deadlines to stay relevant for the ongoing demand momentum.”

Among the companies eyeing new ‘A’ grade office spaces in Hyderabad this year are: Qualcomm, Service Now, Facebook, Infor etc.

Apart from the entry of these prominent players, another reason for the massive jump in supply figures, market, insiders say, is the completion of projects that had been put on hold during the pre-bifurcation period. “A lot of projects that developers were sitting on previously were launched post-June 2014 (after Telangana was formed), once the political climate improved. These ventures are on the verge of being ready and will add to the 2019 supply,” said Samson Arthur, branch director of Knight Frank, reiterating Hyderabad’s promising run at in the commercial real estate market. Even in the residential segment, Arthur said, the supplies will be impressive, even as the costs see an upward movement.